Intercom co-founder and Chief Strategy Officer Des Traynor discusses why retention is more important than conversion in modern subscription businesses.

1. Retention is the new
conversion
@destraynor from @intercom

2. And it’s not just SaaS businesses realising this

3. BEAUTY

4. EVEN LIPSTICK

5. CLOTHES

6. EVEN UNDERWEAR!

7. BEARDS!

8. MEAT?

9. JUST THINGS FROM JAPAN!!!

10. I’M NOT EVEN CLOSE TO BEING DONE

11. If you can think of any product,
no matter how weird,
someone somewhere
is offering a service to get it
per month…

12. Two magic words:per month

13. Brand promiscuity → Brand loyalty
Buy before you try → Try before you buy
Complex sales process → Low/no-touch sales process
Marketing built around conversion → Marketing built around success
Chaotic revenue → Predictable revenue
How we’ve changed…

14. This subscription world is here to stay
It’s a very lucrative world
It’s a different business model
The role of marketing changes
The new role is about making your customer successful
So what?

15. Retention is more
important than conversion

16. We’ve learned a lot
about conversion over the years

17. Ads
SEO
SEM
SocialWOM

19. A. B.

20. Sign up now
If you’re interested in
getting started click here

21. Sign up now Sign up now

22. Sign up now
Sign up now

23. Sign up now Sign up now

24. ✓Top of funnel
✓Website design
✓SEO
✓A/B testing
✓Buying ads
✓….

27. Retention is the next funnel

29. 1,000,000 active customers after 16 months
1,000,000 customers after 4 days
or

30. How do we measure it?

31. Net dollar retention is the defining
metric of a subscription business.
If you are considering a subscription model,
churn and expansion will define your success.

32. The role of retention
€0.00
€10,000.00
€20,000.00
€30,000.00
€40,000.00
€50,000.00
€60,000.00
€70,000.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48
1%
expansion
1% churn

33. No growth or contraction
0
500
1,000
1,500
Jan 2019 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

34. Does your business grow by default, or shrink by default?
0
500
1,000
1,500
Jan 2019 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
by adding new customers
by expanding from existing customers

35. Grows by $100 and contracts by 1%
0
500
1,000
1,500
Jan 2019 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan

36. What does “good” look like
Twilio
Atlassian
Slack
Pager duty
New Relic
Net Dollar Retention
0% 50% 100% 150%
target range
120%-140%
155
148
143
140
115
Try logos

37. LTV > CACLifeTime Value of a customer Customer Acquisition Cost

38. So where does it usually go wrong?

39. 💩
Content /
SEO
Advertising
Virality
Word of
mouth
Media/PR
Homepage

40. 💩
Content /
SEO
Advertising
Virality
Word of
mouth
Media/PR
Homepage Signs up

41. 💩
Content /
SEO
Advertising
Virality
Word of
mouth
Media/PR
Homepage Signs up Onboarding

42. Content /
SEO
Advertising
Virality
Word of
mouth
Media/PR
Homepage Signs up Onboarding
Happy
customer

43. Content /
SEO
Advertising
Virality
Word of
mouth
Media/PR
Homepage Signs up Onboarding
Happy
customer

44. Content /
SEO
Advertising
Virality
Word of
mouth
Media/PR
Homepage Signs up Onboarding
Happy
customer
Former
customer
Happy customer
of another product
💩

45. 💩
You have to work very hard to stop it all going to

46. Content /
SEO
Advertising
Virality
Word of
mouth
Media/PR
Homepage Signs up Onboarding
Happy
customer
Former
customer
Happy customer
of another product
💩

47. Customer retention is
built on great onboarding.

49. Text here

50. WHAT IS CUSTOMER
onboarding?
Trying it out
Buying and paying for it
Getting set up for success
Buying more over time
Learning about changes

51. What makes for great onboarding?

52. ?
🙂😑
Signup form Product

57. Marketing team Product team
Onboarding
(team?)

58. 1. Interview customers who have recently signed up for your
product
2. Decide which customers you can onboard and what their 4
forces are
3. Design an experience for customers that walks them
through to their goal
4. Have metrics for what success looks like for their use case
5. Ensure that product and marketing work in parallel
How to improve it…

59. 1. Interview 4 types
of recent signups

60. Signed up, and then vanished
What were they looking for? Are they an actual prospect?
Signed up, started a trial and converted recently
How did they know? What did they need to see?
Signed up, started a trial and cancelled recently
What went wrong, what was missing, would anything have changed
their mind?
Currently on a trial with your product
What open questions do they have? What else are they doing? What
were they doing before they came to your product?

61. 2. Decide who you can onboard

62. N
eed
Desire
Capability

63. N
eed
Desire
Capability
✓ Need it
✓ Want it
✕ Can do it

64. N
eed
Desire
Capability
✕ Need it
✓ Want it
✓ Can do it

65. N
eed
Desire
Capability
✓ Need it
✕ Want it
✓ Can do it

66. 3. Use the four forces

67. existing
solution
new
solution
Reasons to switch
Reasons to stay
Problems with Current Product Attraction of New Product
Existing Habits & Allegiances Anxiety & Uncertainty of Change
PUSH PULL
ANXIETYHABIT
The 4 forces influencing a customer switch from or to a competitor

68. 4. Design specific onboarding
for each type of customer

69. 1. If your product has different users, you need different ways for them to get started
Day 1
“Let’s show you
Project Reporting!!!”
I’m an agency owner looking to measure
consultant productivity
Our client engagements need better
paper trails for decisions made
We’ve been on MS Project for years and
think it’s time for an upgrade.
I adopt this in every company I work in
Just let me get started

70. 2. Have targeted help, support, docs, tutorials, case studies to help them succeed
Consultant reports How your team tracks work Improving your %
An example audit log Case study #1 Practical Tips
What’s new in our product”
“The new way to manage” Pitching your team Importing from MS Your first week
How to search
I’m an agency owner looking to measure
consultant productivity
Our client engagements need better
paper trails for decisions made
We’ve been on MS Project for years and
think it’s time for an upgrade.
I adopt this in every company I work in
Just let me get started

71. 5. Measure the changes
you want to see

72. What do your best customers do?
Add 10 friendsSubscribe to 3
podcasts
Configure
5 alerts
Upload
5 files Invite their
teammates

73. Ensure that marketing and product
work in parallel.
When one changes, the other adapts

74. Your onboarding must improve
as your product improves

75. Optimizing
vs
Redesigning

76. Don't get sucked into black hole of tiny
optimizations. Know when to reset.

77. Performance
Change in
product
Little
Good
Lots
Bad
Optimize ?
??

78. Performance
Change in
product
Little
Good
Lots
Bad
Optimize ?
Redesign?

79. Performance
Change in
product
Little
Good
Lots
Bad
Optimize Redesign
Redesign?

80. Performance
Change in
product
Little
Good
Lots
Bad
Optimize Redesign
RedesignRedesign

81. There’s only one good case for optimization:
When you think you’re doing the right thing,
but just need to make it better

82. An Intercom Example

83. <script>
window.intercomSettings = {
app_id: “####”,
name: "Nikola Tesla", // Full name
email: "nikola@example.com", // Email address
created_at: 1312182000 // Signup date
};
</script>

84. HOW TO HELP AS MANY CUSTOMERS AS POSSIBLE TO
Install the JavaScript correctly
our 2011 definition of onboarding

85. 2011

86. 2014

87. Thankfully we talk to our customers :)

88. v
v

90. The product had changed so
the onboarding needed to change

91. HOW TO HELP AS MANY CUSTOMERS AS POSSIBLE TO
Install the JavaScript correctly

92. HOW TO HELP AS MANY CUSTOMERS AS POSSIBLE TO
Get their users into Intercom

94. Email address to new app conversion rate
0%
10%
20%
30%
40%
50%
May June July August September October November
~30%
CSV signup
launch
~45%

95. New apps by signup type
May June July August September October November
JS installs
CSV imports

96. N
eed
Desire
Capability
✓ Need it
✓ Want it
✕ Can do it

97. N
eed
Desire
Capability
✓ Need it
✓ Want it
✓ Can do it

98. This comes from having
a relentless focus
on high impact work

99. Eat, don’t snack

100. Reach x Impact x Confidence
Effort
RICE
score
=

101. When a good org is mature,
there’s not a lot of work here.
This is the core of our strategy.
It’s hard work.
It’s meaningful work.
It works.
We need to stay way out of here.

102. If you want to have a high impact team,
stay away from low impact work

103. So…

104. Net dollar retention will be your defining metric.
It comes from successful users using your product a lot.
Successful users come from great onboarding.
Great onboarding must be a key product area for you.
Focus on impact, don’t snack.

105. Thanks!
@destraynor from @intercom